IPG plans to restructure, seeking $US250 million in savings as the global advertising group forecasts negative growth for 2025.
Net revenue fell 1.8% to $2.4 billion in the December quarter. For the full year organic growth was just 0.2%, returning $9.2 billion.
Ahead of the planned merger with competitor Omnicom, the company is “undertaking a program of accelerated business transformation” leading to savings of about $250 million in calendar 2025.
IPG forecasts a fall of 1% to 2% in full year revenue for 2025.
“Solid new business momentum in the fourth quarter and early 2025 will begin to come online later this year, though it will not offset sizable client losses incurred last year due largely to changes in the media trading environment,” said CEO Philippe Krakowsky.
“Solid new business momentum in the fourth quarter and early 2025 will begin to come online later this year, though it will not offset sizable client losses incurred last year due largely to changes in the media trading environment,” said CEO Philippe Krakowsky.
“Factoring in those headwinds, and with the benefit of otherwise sound underlying performance, we are forecasting an organic decrease in revenue for the full year of 1% to 2%.
“Given the rapid and ongoing evolution of our industry, we will be undertaking a program of accelerated business transformation this year, designed to enhance our offerings and drive significant structural expense savings.
“This blueprint includes improving operating efficiencies at a number of our agencies, strategic centralization of many corporate functions, speeding our progress on simplification and platforming in both corporate services and certain areas of client delivery, greater offshoring and nearshoring, as well as further improving real estate efficiency.”
Krakowsky said the proposed deal with Omnicom will result in the industry’s most dynamic and well-resourced company.
“Our understanding of consumer behaviour at every step of the marketing lifecycle will be deeper than any other provider, as will our capacity to invest in emerging technologies,” he said.
“Together, we will bring to market an unparalleled range of talented practitioners in every marketing and sales discipline, supported by exceptional technology, data, production, and commerce platforms, to unlock growth opportunities and measurable results for our clients and for the combined company.”
Omnicom's takeover of IPG will create the world's biggest advertising player.
The marriage of rivals brings together the world’s third biggest advertising group, Omnicom, with the fourth, IPG, to form a company with 100,000 people and revenue of $25.6 billion (net revenue of $20 billion), with 57% of that in the US.
IPG's December quarter numbers.
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